The promoter MIT Group Holdings Nepal, a member of the Ghale group of companies which has diverse operations in Australia and other countries, said that Prime Minister Sushil Koirala was scheduled to lay the foundation stone of the project.

The Sheraton Kathmandu Hotel will be located on Kantipath adjacent to the office of Keshar Library, opposite the west gate of the Narayanhiti Palace Museum. The hotel, which is due to open in February 2018, will be spread over 14 ropanis of land.

US-based Starwood Hotels and Resort Worldwide Inc, one of the world’s largest hotel companies that owns, operates, franchises and manages hotels and resorts, will manage the hotel under its Sheraton brand. The MIT Group had signed an agreement with Starwood last year.

The new hotel will offer 218 suites and guest rooms, a health club, spa and retail outlets and provide 450 new jobs. It will also feature a 1,000-seat conference hall which will be the biggest hall in Kathmandu, the group claimed. In addition, there will be two conference rooms, three meeting rooms and a board room.

“We expect that Nepal will see improved business activities and economic growth in the days ahead that has encouraged us to invest in the hospitality sector,” said Shesh Ghale, an Australian-based Nepali millionaire and owner of the project.

As round-the-year occupancy of Nepal’s five-star hotels remains a big concern, Ghale said that an improved business environment was also likely to put Nepal on the map of quality tourist destinations. The Tourism Ministry’s statistics show that Nepal’s five-star hotels encountered a glut of rooms in 2013 due to a proliferation of new accommodation ranging from guest houses to home stays which pulled away potential customers from luxury properties.

The five-star hotels achieved an average occupancy of 58.85 percent last year, down from 62.76 percent in the previous year. Out of the 678,535 room nights produced last year, only 399,318 were occupied. There are 10 five-star properties in Nepal, eight of them in Kathmandu and two in Pokhara. An average hotel occupancy rate of 60 percent or below is considered to be very worrisome for the industry.

Meanwhile, the MIT Group is also holding negotiations with International Finance Corporation (IFC), the private sector lending arm of the World Bank Group, to mobilize capital for the project.

Ghale, who is also an incumbent president of the Non-Resident Nepali Association (NRNA), said that talks with IFC were going on but that it had not been finalized whether the group would utilize IFC capital. The project’s payback period is 15 years from the date of its formal opening.

The Sheraton Kathmandu Hotel marks the re-entry of the Sheraton brand in Nepal. It had earlier managed the Hotel Everest as the Hotel Everest Sheraton in the 1980s. After the Hyatt Regency, no other international hotel chain has come to Nepal. With domestic and inter-regional tourism aiding hotel demand, a range of leading global hotel chains have planned their presence in Nepal.

The Everest Hospitality Group, a subsidiary of the MS Group, had formally begun work to construct a 221-room five-star deluxe hotel in Nag Pokhari, Naxal under the banner of Marriott International, a leading hotel chain based in Maryland, US.

The group claimed that the proposed hotel would be the first five-star deluxe hotel in Nepal after its completion. The MS Group is currently constructing a four-star hotel in Thamel named the Fairfield. The 10-storey hotel will have 108 rooms and will be spread over two and a half ropanis.